Short-Term TSLA Price Movements - 2016

[FredTMC]

CNBC is having Chanos on now so get ready

EDIT: He is thoroughly poo poo'ing the SCTY acquisition ATM

No waaaayyyy?' Really?!

Let me get this straight... yesterday they grossly mis-report and affect the stock price and now today they give airtime to this individual?

Incredible.

 

[austinEV]

I believe, AustinEV, that the playing field is not exactly so titled toward Tesla as you lay it out. My understanding of California's situation (I am not familiar with the handful of other states' rules) is that an automaker out of compliance with ZEV sales needs purchase an EV credit OR pay a fine. Therefore, if I understand it correctly, the fine places an upper bound on the amount of a credit.

Yeah upper ceiling of 4k to 4.5k. Above that and the automaker may strategically choose to pay the fine rather than helping tesla. Still, they can force it to be about 4k. I didn't mean to imply they could make them super valuable, just work to protect the 4k value.

 

[BobSk]

CNBC is having Chanos on now so get ready

EDIT: He is thoroughly poo poo'ing the SCTY acquisition ATM

Chanos tried really hard to bash BABA around $60, he said he shorted it, BABA's accounting is like Enron, etc. Look what happened to BABA in a few months, it's now above $100.

I am not saying Tesla will react the same way as BABA. I am saying Chanos gets wrong more often than right. I think he makes money through market manipulation instead of intelligent analysis. The credibility is extremely important for these manipulators, so when they say something, they can get the wolf pack to act together to move the stock. Once the Tesla story is fully unfold, this Chanos will completely lose his credibility. Some investors already know what he is about.

 

[esk8mw]

BTW, as I haven't seen anyone comment on it yet, the SEC retroactively uploaded a bunch of CORRESP and UPLOAD filings going back to May for SCTY. Curiously, SCTY received comments on its 10-K, but I still haven't seen any comments on the S-4 (even though the SEC has approved it and they are clear to vote now).

Anyway, you can see what the SEC was focused on and how SCTY responded, which is always interesting. I haven't gotten all the way through it yet but there's definitely some interesting discussion about debt, MYPower loans, regulatory credits, etc. I recommend starting with the 6/8/16 CORRESP filing (which gives SCTY's responses to the SEC's initial comments) and follow the chain from there if you are so inclined.

Here's an interesting line from SCTY's 7/14 response to the SEC re: working capital disclosure:

"We are taking steps to ensure we have sufficient working capital to fund our business and anticipated future operating activities that include: (i) the establishment of new loan product that we expect to generate immediate cash, (ii) increasing margins on our commercial products, and (iii) reducing our customer acquisition cost through restructuring our sales and marketing team and expenses."

 

[AlMc]

To the town in Wyoming, or to Tesla's IR?

You'd be more likely to get a response if you spelled Jeff EVANSON's name correctly.....



*****am writing this partly because it's not the first time in the past days that his name has appeared here thus misspelled*****

Well, that would explain a lot. Here I thought he ignored me because he did not like the whole 'sizzle/steak' thing

 

[austinEV]

Here's an interesting line from SCTY's 7/14 response to the SEC re: working capital disclosure:

"We are taking steps to ensure we have sufficient working capital to fund our business and anticipated future operating activities that include: (i) the establishment of new loan product that we expect to generate immediate cash, (ii) increasing margins on our commercial products, and (iii) reducing our customer acquisition cost through restructuring our sales and marketing team and expenses."

Product.... No factory leaks....

well this could be it. What the heck is it? It cannot be productizing solar installations, they aren't Tesla's to sell.

Edit: I am an idiot, this is an SCTY filing. Maybe it is a consumer level solar bond product.

 

[EnzoXYZ]

No leaks, no rumors, no nothing! This suspense is killing me!

 

[esk8mw]

Product.... No factory leaks....

well this could be it. What the heck is it? It cannot be productizing solar installations, they aren't Tesla's to sell.

Edit: I am an idiot, this is an SCTY filing. Maybe it is a consumer level solar bond product.

Well, it will effectively be a Tesla filing in less than a month. And it's something that generates immediate cash. And Elon has said that cash is no longer needed for Q4 or 17Q1.

Hmm...it appears the theory many of us had about SCTY helping fund TSLA's growth is picking up steam.

 

[MitchJi]

Personally, I think the $7500 individual tax credit is almost irrelevant to demand for Model 3. Sure, there are a some that will only buy if they can get the $7500 credit but the vast majority will be buying because it will be a better car than anything else you can buy for the price regardless of the tax credit.

I'd prefer not having to sell the 10-15 shares of TSLA, by being able to use the $7.5k credit!

I agree with your assessment. There will be a time when the more compelling vehicle won't be subsidised. However I think the current arrangement is better for the sector as the individual manufacturer cap means that every manufacturer has the opportunity to get the benefit which should encourage them to enter the market even if they are a little late. If the subsidy was uncapped by manufacturer we would probably have Tesla as the runaway winner and having little competition.

We will probably have that outcome regardless of the incentives.

I haven't gotten all the way through it yet but there's definitely some interesting discussion about debt, MYPower loans, regulatory credits, etc I recommend starting with the 6/8/16 CORRESP filing (which gives SCTY's responses to the SEC's initial comments) and follow the chain from there if you are so inclined.

I was going to request that you post a summary of what you discover, and you already beat me to it.

Thanks, and please continue!

 

[Johan]

Well, it will effectively be a Tesla filing in less than a month. And it's something that generates immediate cash. And Elon has said that cash is no longer needed for Q4 or 17Q1.

Hmm...it appears the theory many of us had about SCTY helping fund TSLA's growth is picking up steam.

Could it be a kind of financial product marketed toward consumers in the US by Tesla (Tesla post SCTY merger that is) where the customer signs up for a package deal that includes a car lease and a solar roof with a PPA?

Edit: Elon seems to like the notion of making things super simple for the end consumer. Perhaps they'll bundle all their products and services (solar roof, home battery, car) in one sweet deal. In the future that could also mean reducing monthly payments through being a net producer of electricity (using micro grids or net metering) and possibly having the autonomous car you're leasing doing work when you're not using it.

 

[esk8mw]

I'd prefer not having to sell the 10-15 shares of TSLA, by having the credit.

We will probably have that outcome regardless of the incentives.

I was going to request that you post a summary of what you discover, and you already beat me to it.

Thanks, and please continue!

I've gotten through it all now and honestly, most of it is way above my head. I need someone smarter than me like SBenson or neroden to read through it and give an update if you want substantive updates on the responses.

The main theme is that the SEC was pressing SCTY to be clearer about working capital (and assumptions about whether it will actually be sufficient to meet needs for the next 12 months as SCTY has suggested), the way they talk about "positive cash" in the SH letter (SEC initially thought it was CF from ops but it clearly states otherwise) and to be clearer about cross default risks in debt covenants. The main theme is that SCTY stressed how they have flexibility to slow operations and monetize future cash flows in order to have the financial statements look completely different if they so choose. Also talked a bit about layoffs and severance costs and other TSLA acquisition costs but I didn't see anything material there that hasn't already been discussed.

In the end, the SEC always wins and SCTY agreed to talk more about the risks and be clearer in their disclosures (as they started to in Q2 10-Q, apparently). There weren't any showstoppers where they had to go back and amend filings or anything like that. Generally, if you can get away with "promising to do better next time" then you successfully completed the random SEC comment letter process.

 

[racer26]

Competing incentive free is a big part of why Tesla has always advertised their price without incentives. They're building a car that is the best car you can buy for $35k, regardless of whether or not the government will give you money to help buy it. If the Model 3 is objectively the best vehicle I can buy for 35k, AND the government is going to give me 7500 to help buy it, why would I even consider buying a 35k luxury ICEV? Tesla is planning to be the obvious choice incentive free, and that turns the incentives directly into 7500 reasons that you shouldn't even consider an alternative.

 

[Turing]

Well, it will effectively be a Tesla filing in less than a month. And it's something that generates immediate cash. And Elon has said that cash is no longer needed for Q4 or 17Q1.

Hmm...it appears the theory many of us had about SCTY helping fund TSLA's growth is picking up steam.

Will be awesome if Elon spells this out soon, "most people have the SCTY deal all wrong, it makes tesla's cash flows and capital position better not worse! and this even includes in the short term as well as long term."

 

[geneclean55]

Hmm, Elon is tweeting. Presentation prepping done with?

 

[CorneliusXX]

We will probably have that outcome regardless of the incentives.

Probably, but it is not in the best interests of consumers for this outcome to occur.

 

[koolkool]

Lol, Chanos's attack ain't working. Looks like he had paid for a bunch of bear articles to be published at the same time as his appearance. Yahoo Finance feed is suddenly flooded with bear articles.

 

[Tslynk67]

Maybe it's a new product that will "Eliminate Elon announcement anxiety"...

 

[racer26]

Well. Just voted my insignificant amount of SCTY shares in line with the board recommendation. Every little bit helps.

 

[ZsoZso]

Lol, Chanos's attack ain't working. Looks like he had paid for a bunch of bear articles to be published at the same time as his appearance. Yahoo Finance feed is suddenly flooded with bear articles.

Oh, come on, give the man a break.
Don Quixote only fought wind mills and had trouble achieving anything, while Chanos is fighting a Tsunami, much tougher battle...

 

[racer26]

Flooded with bear articles, AND today's slow upward grind seems to be accelerating a bit. Interesting.